State of the Australian Labour Market 2019

ApplyDirect looks beyond the figures at the state of Australia’s labour market in 2019, revealing strong jobs growth yet steady unemployment.

Australia’s jobless rate remains steady at 5%, as revealed in the Australian Bureau of Statistic’s labour market figures for December 2018. In the three months leading to November 2018 job vacancies rose by 1.7% to reach a record-breaking high of 242,900, indicating less competition for job openings. As well as this, employment in Australia sat at 12,714 in December of 2018, an increase upon last month’s 12,692 and the highest ‘employed persons’ to date. Keep reading for more detailed insights into the current state of play.

The Current State of Play

December 2018

Unemployment Rate

5%

Unemployed Persons (15-65)

12715.06

Inflation Rate

1.8%

Wages Growth

2.3%

Steady Unemployment:

Unemployment across the Australian economy remains steady from December 2018 at 5% Despite  around 200,000 new jobs being created each year for the last 15 years, this jobs growth has still not been enough to push down the unemployment rate further, due to a welcome increase in the labour force participation rate – which measures the proportion of Australians 15 years and over either in work or actively seeking it – which now stands at 65.6%. This is also the highest participation rate recorded since September 2012, a sign the national economy is functioning relatively well despite persistent low wages growth.

Persistent Low Wage Growth:

As for the less positive news, wages growth remains slow across the economy, with the pay packets of most Australian workers outside the public sector mirroring the inflation rate of 1.8% per annum. The Reserve Bank noted that wages growth was lower than expected last year and could not solely be attributed to spare capacity in the labour market and inflation expectations. This low wage growth is also contributing to an increase in household debt, with a 2018 Australian Council of Trade Unions Poll finding that only 33% of those surveyed got a workplace raise which covered their increased cost of living.

Record Population Growth Driven By Overseas Migration:

Another area of interest is the record population growth rates Australia continues to experience, with the nation’s net residential population increasing by 390,500 in the year to June 2017-June 2018. This puts the total national population at just under the landmark 25 million. Of this strong population growth – the highest in the developed world – a large proportion was driven by a huge 236,700 new arrivals (June 2018) from overseas who continue to be attracted by our relatively sound economy and safety. However, critics point to our high population growth as a key contributor to slow wages growth and infrastructure bottlenecks, ensuring this issue will remain a political hot potato for the time being.

How Australia Compares to the Rest of the Developed World

Overall, Australia’s labour market and broader economy continues to do reasonably well, low wages growth aside when compared to many other parts of the world. However, when comparing our unemployment rate to key economies within the OECD, our performance is rather middling, higher than the US, UK and our Kiwi neighbours in New Zealand and Germany, yet lower than Canada and recession-wracked France. There’s still work to be done however, with lifting the pay packets of workers through improved productivity the first priority.

 

OECD Unemployment Rates – December 2018

Australia

5.0%

Canada

5.6%

France

9.1%

Germany

3.3%

New Zealand

4.3% (2018 Avg.)

United Kingdom

4.0% (October 2018)

United States

3.9%

 

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